zipcar case analysis

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Case Analysis on Presented by, Group 6 Niraj Ghimire Amit Pathak Subigya Regmi Prajwal S Shrestha

Author: amit-pathak

Post on 06-Nov-2015




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Zipcar Case Analysis


Case Analysis on

Case Analysis onPresented by,Group 6Niraj GhimireAmit PathakSubigya RegmiPrajwal S ShresthaZipcarCar usage via a membership organization.Founded in 2000 by Antje Danielson andRobin ChaseProvides reliable and convenient access to on-demand transportation.Hassle free service No fuel costNo mantainence costNo Insurance cost

About the EntrepreneursRobin ChaseMajor in English, French and philosophy at Welleseley College.MBA from MITs Sloan School of ManagementAntje DanielsonWorked for University Committee on the Environment at Harvard UniversityPhd from the Freie University, BerlinDanielsons idea to start the ventureChase believed the idea.Insight behind ZipcarAlready implement in few countries of Europe.Best suited for Urban Location with the dense base of potential users.Expensive parkingLimited need to driveHigh percentage of population using public transportCase FactsSeveral variations of the Zipcar business model along with their financial plan.Include a very early version and a version developed just prior to the launch of the business, Includes the data from the first few months of operations.Underlies the business model for the venture and to discover how these assumptions are holding up as the business is actually rolled out.IssuesIs the business practicable in terms of market demand, opportunities and other environmental factors?What were the flaws in the business model of Zipcar due to which it couldnt get an interest of Investors in the early phase?Was the pricing strategy one of the reason to position Zipcar different from other competitors and to cover its COGS at the early phase of the business?How important was the technology building in Zipcars business model?Was the variable cost and overhead cost a hindrance in the growth of Zipcar?

Analysis 1Gap in the market.lack of satisfaction among every consumerHuge prospect in terms of market size.66 million population in 20 metropolitan cities20 million population using public vehiclesstrong demand for the niche product in US.The primary prominence as the opportunity was the convenience and the cost saving.

Analysis 2The idea of car sharing business model was relatively new in US.Lack of experience of both entrepreneurs.Unjustified financial plan and unclear numbers in financial statement.Huge loss in the first year.The business model has not incorporated all the costs involved in the business as the revenue of the company increases.

Continued..No breakeven point mentioned in the proposed business model.lacked to incorporate the staff increment to meet the growth in business.Annual fee of membership is too high to hurdle.Cost related to parking has been ignored.

Analysis 3The critical component of business growth of Zipcar.Higher annual subscription fees.Change in pricing model after the failure.Revise its targeted revenue and cost looking into its actual figures and fails to covers it COGS.

Analysis 4Important factor for the proper operation of the Zipcar.The business was based mostly on web and hence targeted such customers.Online reservation system.Black box to which information about the user would be transferred.present the right card to the right car at the prescribed timeAnalysis 5Variable cost and overhead costs higher than their expectation in the business plan.Lease cost at $4800/vehicleParking cost at $750/vehicleFuel bill 10% higher than expectedThe overhead costs higher than expected at $44000 per month.

ConclusionRecommendationIts original pricing model should consider in the financial plan.It needs to consider further its marketing expenses to increase its membership which further increases its all overhead costs.focus highly on research and development.. Maintaining superior technology can give them a competitive edge over their rivals.

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